The options provided relate to different strategies for managing risk. In a typical risk management matrix, responses are categorized as Avoid, Mitigate (Reduce), Transfer, or Accept. "Insurance" is the most direct and classic example of a Risk Transfer strategy. This approach is used for risks with a low probability but a high potential impact. An organization pays a premium to a third party (an insurer) to shift the financial burden of a potential loss, thereby transferring the risk. While other options can involve risk transfer, insurance is the purest form of this strategy.

A. new technology: This is typically a source of operational change or a tool for risk mitigation, not a fundamental risk response category itself.

B. forward contract: This is a specific financial tool used to transfer price volatility risk, making it a subset of the broader 'Transfer' strategy, not the category itself.

C. outsource: This transfers operational risk to a supplier, but the buying organisation often retains significant reputational and strategic risks. It is a method, but insurance is the archetypal example.

1. Waters

D. (2011). Supply Chain Risk Management: Vulnerability and Resilience in Logistics. Kogan Page. In Chapter 6

"Responding to Risk

" Waters outlines the main responses

including risk transfer or sharing

stating

"The most common way of transferring risk is through insurance" (p. 118).

2. Slack

N.

Brandon-Jones

A.

& Johnston

R. (2013). Operations Management. 7th ed. Pearson. Chapter 18

"Operations improvement

" discusses risk management matrices and notes that for low-probability/high-consequence risks

a 'risk transfer' strategy

such as taking out insurance

is appropriate (pp. 578-579).

3. Christopher

M. (2016). Logistics & Supply Chain Management. 5th ed. Pearson. In the context of managing supply chain risk

Christopher discusses resilience strategies. Risk transfer through mechanisms like insurance is identified as a key method for mitigating the financial impact of disruptions (Chapter 10).